DSS - Earnings call transcript Q4 2017

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day everyone and welcome to today's Fourth Quarter and Year End 2017 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later you will have the opportunity to ask questions during the question-and-answer session. Please note that this call may be recorded. [Operator Instructions] It is now my pleasure to turn today’s conference over to Investor Relations Director, Jody Janson. ahead. go please Sir,

Jody Janson

Janson, I from the thank Fagenson. of quarter Document earnings CFO, me and am year everyone. Security Jones; at us And Phil are Systems. and for Board, CEO, today the XXXX joining Jody I call. for Security today's conference Chairman Relations want afternoon Robert Director everyone Document call to on joining full Investor DSS Good the Systems' Ronaldi; fourth Jeff

open its the Xth, XXXX will for and our questions. issued March we Following prepared end Tuesday, call Document a On remarks, year results. financial press fourth Systems Security release announcing quarter

Company's we I'll Before statement. Safe review the begin, Harbor

Act without Reform pursuant words believes, expects, Private differ results to risks Securities statements Harbor similar the intentions plans, to statements the and the words relating results plans, and to provisions of to cause of potential subject Forward-looking actual including the and are resources the value, intends, this These are projected. adequacy as on Safe and materially contains made from statements limitations, strategies, call, could that Litigation uncertainties phrases. Company's objectives, anticipates, and such forward-looking expectations,

for specifically of factors, the the but Company's Annual could section noted fiscal this statements, with on other limited Commission. ended forward-looking the to, XX-K the important year XXXX, not and are filed to Exchange addition in those In the Securities in risks Factors Risk factors that uncertainties December included, and in result differences those XX, Form disclosed Report

today, differ projected March why update Company statements and of actual this update or reasons call to statements in statements. being assumes results the part as to the are Forward-looking XXXX, forward-looking those could made of forward-looking made the from X, the no obligation as

adjusted would to Board, to regarding of call the additional Robert Fagenson. turn EBITDA. discuss I over now measure In During press non-GAAP you Security issued, find like Systems this adjusted will reconciliations Robert? net the EBITDA. Company's loss of disclosures will to Document release today, financial management the call and the Chairman

Robert Fagenson

thank today. that you, company. I your us joining could and really of am interest interest add, appreciate Jody, loyalty Phil turn right Thank you I going you so your right for Ronaldi, appreciate in and can Jeff nothing my it to and you’re I It over and all then an will. to is I will if be we’ll Jones Q&A, anchoring on give have who for now information helpful update I I

over So Phil, you. it’s to

Philip Jones

you, that XXXX fourth Thank are we on financial and also year X summarized SEC. filed March March the detailed XX-K which Robert. quarter our On Tuesday, we and announced Tuesday, results the full in Xth, press with release in

revenues highlighted The quarter the Company's history. X% generated was by in in XXXX. group the folder fourth a compared products which this the propelled $X,XXX,XXX As of the That for group, as revenue. fourth from our quarterly press our to highest of in X% increase is revenues of increased quarter printed release, increase our

from increase which of this XXXX steady customer in project quarter will phase of revenue began traditional third recognized monthly the This the were were first production a setup As fourth offset largest decrease the into from $XXX,XXX has provided the had some last the orders as partially quarter a of group of customer. fourth strength quarter brings The Company third XXXX recovered had by slower we due in more as readings year customer in income technology-based group timing year’s for into sales, this quarter. the customer AuthentiGuard impact the production. Company’s of which our to was and a last expected, Company the pushed below

during and reflected sales So progress first its with year success very full are multi-year this the quarter, customer agreement. we decrease pleased a of with the in the we’ve despite had

the XX%. printed with sales products total X% up than and revenue up technology-based XXXX lower For year, X% was

groups performers XXXX. grown steady to have Our as printed been and products consistent had XX% XXXX in compared

revenue two X.X% was has generated that consistent believe year positioned growth during not of So to consistent And XXXX, markets approximately these profitable opportunities the continue growth while to we average not expectations. and our growth. disappointed with future businesses in reliable be are well targeted we been capture for

focused during technology-based sales, the IT some of product significant of line. as mix our has its saw AuthentiGuard resources in our the For Company provided traditionally XXXX in it traditional a support services, product and change transitioned away the to operation we from

year, technology AuthentiGuard with and the a was will approximately fees the customers fourth was IT the we emergence trend approximately result one on XXXX. with with This of services This continue XXX,XXX. reduction primarily decrease settlement the the most of as now we cost approved notably of decreased coming of of of potential AuthentiGuard during during down expanded of during professional achieved impact cost represent expect our from made of favorable XX% firms. quarter payment XXXX legal current of impact Total reduction negotiated in $XXX,XXX traditional sales Offsetting expenses uses additional XX%. quarter our of the litigation we a from X% in sales. largest AuthentiGuard along the customer For sales AuthentiGuard board revenue the

to significantly In addition, of cost stock compared as XXXX. the compensation quarter fourth decreased based

operating expense decreased total all X% achieved. For categories year, with corresponding decreases the nearly cost in

product on us ensure controls profitability the progress our transition and significant This without AuthentiGuard divisions During divisions consistent in in significant to on technology achieve cost increase. our resources out. at of the of support development we a we operating year to focused cost and focused the allowed transfer help AuthentiGuard roll to

XXXX roll throughout our to We to group continues expand as marketplace. resources AuthentiGuard add begin to this in expect of its its global customer to out

weighted which XXXX. towards the heavily of quarter. cost the was AuthentiGuard net more loss achieved which of had group, year our XX% technology Company of and strength impact while loss reduced legal quarter, settlement improving than a the the net the was products XXX,XXX Full XXX,XXX favorable a For during which printing lower in income the reflected were margin net the sales,

Company with for improvement strives profitability, see adjusted this the technology-based net not we of in positive income while as pleased the for an consistent to increase its regard are profit XXXX, EBITDA We In XX%. product did prospects opportunities. hampering for

As that growing asset where and we we’ve we not net XXXX potential had stated technology-based Achieving of traditionally our in roll compensation the press, XXXX. supports the has due adjusted because an and EBITDA for our EBITDA at is management to IT business metric to stock-based support growth profits result. in a but shows are public and to stable which our our developing on impact opportunities, profit our put which significant for adjusted generate making moment to operations that in have model the being important company, large products out only profitability saw the product investments and beginning the amortization

as during assets sheet, a December were the balance XXXX. were our unrestricted the and recent cash at to of ratio substantially improved net strong significantly decrease, Accounts Moving lower current current expenses of $X.X liquid XXXX, than payables assets position to liabilities so remained million million. history XX, showed also accrued accrued our $X.X of

aggregate short-term a and that XX, the and XXXX. the on hold we debt at to amount due settled notes call of I net a the important to currently Company term for the Now specifically for This we think whereupon making funder related and Company approximately full to approximately the disclosed that the the excluding understand value date, $X,XXX,XXX. owned satisfaction did sole the payment million. the by recently is on basis. underlying this Company recorded full certain to I’m In X-K, this amount of that of and amount is on patterns is the statement, February maturity believes nonpaying the the amount agreement X-K This debt debt the under matured of of the for to I’m Company the their a XXXX. in prior gain the the will of the February was expected the The occurred. related of remedy of liability carrying the obligation $XXX,XXX. the XX, a of amount that be filed net non-cash in will under the underlying $X.X Furthermore, transfer call year satisfied on default Despite the triggered contractual default patterns the at the pay amounts are in funder. funder resolution This the since books Company’s agreement to not result extinguishment funder fact the the for result means certain debt the remedy under end agreement on

the capability secured improve in the the let Company’s our the benefit, we me to will the of the operating and but any call. have have portion Ronaldi, With Absent period and Company fixed color the to increasing division of you in quarter Q&A our for questions on resolution in XXXX approximately we forward will acquisition the along please networking during Thank the turn our of by with production sheet I approximately positive that Company’s will the result know resolution plastics addition debt balance to include $XXX,XXX debt So capital fourth Jeff the using the amount, you. CEO, this a the if to exited their impact resolution with that, press demand. specifically XXXX of it million such $X.X look position. the to on call increase of meet of and of debt this have

Jeffrey Ronaldi

to Phil. the call thank you, everyone us today. joining I for would on Thank like again

AuthentiGuard product began the by even excited this the As and/or commercialization where began more during than of year. Phil in prospects the XXXX earnest noted, our of line we product

we have product XXXX know, major vendors actively and our marks of in our with the that customers client packaging. AuthentiGuard since end to time, of of various forth forms production at you first we As landed applying print the put their of

and times printed the that the the on see. more for million year, XXX labels packaging so $XXX is make for an represents just during potential on But customer global but beginning, fact that to In opportunity a than are we counterfeiting product the this impact problems, million AuthentiGuard beginning customers' only the that not mark

to For geographic current we have been regions. the of customer’s and vendors to lines AuthentiGuard out roll our instance, of breadth product additional current the use they working as expand

expected during printing printers have coming America, now America, We the months. with this South Asia more technology Europe capable and in of North

on lead we have to India opportunity. building to our proof-of-concept for efforts project that team another have that a strong working addition, been sent In significant could

issues learn more the to we of branding and having that are opportunity and finding have continue The front immense as the about We in are facing. us. they more they solutions difficulty

than XXXX I with more about So leave AuthentiGuard ever. excitement

supply teams as wide chain. lot during with a of learned and During our time array been XXXX, global the a and have of this participants we’ve worked and tireless, efforts a extensive we

unique and have market. of end, expertise grow our as attract our technology. execute interest resources. mentioned, Phil that validating development, we is we significant all continues IT AuthentiGuard towards To continues transferred can infrastructure to more Our to in in to set And much our skills resources including as internal as software importantly, and the ability position

like services has an While team all-hands-on-deck. some used DSS generate, requires opportunity caused our traditional this the AuthentiGuard Digital us work to IT the of to

foreign demand of international the also In is difficult that our with To Hong This what late have us the AuthentiGuard of closer not the of only need of to U.S. where AuthentiGuard, addition, end, but development a used in International Kong. market. markets in range we achieve. DSS wider than very to customers opening are skills certain and we XXXX, software in to able group a acquire in expansion proximity of in of range the that of services our do meet especially smartphones to an gives we began been can order prospects capabilities

on. top requires this attract As competition. to seen and skills how have product visual product, the our a to opportunity expertise is our the we're we the from have quite wide to it better and find able talent art working significant retain see art. ability are tune much printing we and than range the frankly exciting of increasingly now But We

will this in think I benefits of see XXXX. the we

if year. great For was our group, a Printed solid not Products XXXX

rely to in being strength Victor, and public financial our New component to to equipment resources research market. and continue more are and Also has our We group packaging, several our making on to printing and help skills Premier performer most our importantly, and of and of the and implementation Packaging benefits large the help the in is needed offset this development from offset the reliable help and consistent with AuthentiGuard. Printing customers. cost we the AuthentiGuard located assist York profitable group investment

located Francisco where access are has and array RFID Plastic event customers, wide that a of commercial DSS group, by and used in Brisbane, array badges. of state San are plastics California sporting Our events government south control group even edge secure and a cutting trusted by badges for just which major residential products that is impressive used of cards by agencies of property and variety

addition, card for In secured state-of-the-art line this just services group the they began don’t customers to where production. do even

new secured in when and next improve productivity In fixed color which in addition, its DSS recently quality service will a few Plastics quite months. press

I am So, where and with the they business our in business pleased fit model.

monetization pattern upside. continue monetization be to innovators, our limit opportunities business. In to IT acquire addition, This unique business of in for providing we risks presents potential significant us seek active the and while

our several patents. made the of offices we initiated take outcome, but damages seeking far. years thus are several know pleased will will certain with XXXX, before the we for During wage of matters These progress likely the we and LED infringement

summarize, excited progress tell prospects products. our to as with exit I’m the as AuthentiGuard we for So can you XXXX and very

a We established more now this market global are much opportunity. experienced player in and

accelerating our in strengths So Printed XXXX I Products progress area in while look we to this continue for leverage market. in

appreciate a I’m DSS. Once through stockholders proposition greatly thank As interest our unique for in your to Robert? for all the you initiatives described confidence. a committed your CEO, and above again, continued creating support value and

Robert Fagenson

team determination. Phil we’ll reach, transitional our Jeff. you, a to with and do first has is strides. Hong and a for XXXX tremendous internally, And to we’re at really turn for answers, in hit wrap-up Kong moving and the is going rebuilt you is speak think as out with extended I which us, opened outpost you're themselves, going results heard over to our forward AuthentiGuard then Thank the questions Jeff to to overseas tremendous that be now Financial have end. it year going

questions. to go let’s operator, So

Operator

go question ahead. go [Operator take Scott our and ahead Instructions] Delrobert with first We’ll Please Investor. from Private

now is line open. Your

Unidentified Analyst

quick a I and So, haven’t but any elaborate when Asia without I heard little just since. is was back I back while had or you if I on wondering anything new possibly question Kong, could in if if because there saw about the expansion news really about Hong anything that?

Jeffrey Ronaldi

Sure.

be of an up technology veteran DSS running of office he Kong. Kong, Asia Hong many So, hired we opened in Vincent name in companies out a the of Hong Lum and will

the potential India, he there, proof-of-concept we As earlier, they us. team a sleep might speak. new just development Well, in a and He up stated the is now, with as of opportunities part for customer, identifying they're that's right doing currently is there with proof-of-concept we customers. getting but speed currently working on another

of process and we’re need As specific with them customers we build here your as sitting to services to that to question, in who them. we Scott? of Asia currently they people are up, are coming have but we there Do discussions have they Pacific any the people Does don’t all the XX% answer of to the many out have understand -- sign today. counterfeits region, and and XX% products deliver there know and to

Unidentified Analyst

Yes, appreciate it. Thanks.

Operator

We John to Gordon Securities. will next Please go Ray with go ahead.

open. Your line is

Unidentified Analyst

want you straight I quarters of where EBITDA. company’s see to future question seven positive with you congratulate And First is my blockchain? your do on

Jeffrey Ronaldi

Well, improve thank consistently overtime. operating we’ve that am to of been the performance glad you. I been it’s recognized the Company And able

is is believe about us into we for blockchain exciting products R&D authentication fit tool fit blockchain in it’s We an regard that a and natural is our there are customers something in blockchain, So appreciate with their AuthentiGuard. and that. with and With we I mobile to opportunity services. discussions and for us,

are incorporated business, I a going new or have is way to to there. blockchain accepted as we something as think So

don’t in product while we specific a blockchain. with yet, have So we R&D are

Operator

It Instructions] questions we appears time. further have [Operator no this at

Robert Fagenson

that question Thank in you, to on EBITDA operator. company last generate. Once the to able has key again our continued been positive

of expanding In Phil has we AuthentiGuard, fact, our are cash you how have and the Jeff told aggressively as in throughout that the we domestically both bank. marketing world. explained

in burning to a than since rather a enough bank are one of result, a money from we do cash it far And have the of the view Company point that. different losses. accreting We is as

and we in prior able make move are as do were choices we So able never years. forward to to

Jeff unless off close gentlemen. it closing that, we and has with will So Phil, other comments,

Jeffrey Ronaldi

good. am I

Philip Jones

you us. Thank everybody joining for

Robert Fagenson

will quarter. you again next you all Well, thank once and with speak we

DSS (DSS) 9 Mar 182017 Q4 Earnings call transcript